Credit unions and financial cooperatives play a key role in helping Indonesia’s largely unbanked population gain access to financial services, especially in rural communities. Bali-based startup Djoin is helping these microfinance providers modernize their lending and operations so they can reach more rural dwellers.
500 Global, which has backed tech startups Canva and Reddit, provided the seed funding to help Djoin to develop its lending capabilities, expand its team and footprint across Indonesia and accelerate its growth.
“To include all of Indonesia in the country’s growing economy, we need to use technology,” says 500 Global’s Khailee Ng. “Credit unions have served many unbanked communities. Using Djoin to help them scale could enable so much more for the nation.”
Backing digitization
Four-year old Djoin offers a tech stack that allows microfinance customers to make deposits and withdrawals and other basic financial transactions. It also serves as an intermediary for loan collection and disbursement from the financial institutions to the borrowers and offers a credit assessment engine for underwriting.
Djoin says it has facilitated up to $35 million in loans in 2023, cutting non-performing loans by more than half for over 80 microfinance institutions in 2022. Its founders’ fintech and credit union operations backgrounds helped them secure $1 million in 2022 to develop their product and acquire new customers.
Separately, US non-profit Accion earlier this year raised $152.5 million for its Accion’s Digital Transformation Fund to support similar startups digitizing operations for emerging market financial institutions. The fund has backed India’s Annapurna Finance and IKF Finance in its portfolio.
